Suppose that you've been hired by 2firms to help them decide how to maximize profits.

1. In the short run, one firm would like to know if it is hiring the right amount of labor. State the relationship (equation) that may be relevant in this setting, and describe how you would use it to tell them if and how to change their labor.
2. Another firm wishes to expand over the long run. It pays its workers 49, and it rents machines for 21. If it hired a worker output would go up by 22, and if it rented one more machine output would go up by 8. Should it hire more workers or rent more machines? Explain, using the relevant relationship (equation).
3. If the firm follows through on your advice in part B, which of the numbers should they expect to change, and why?